Half of providers report revenue losses from credentialing delays

A new survey shows that most hospitals and provider groups are losing money from medical credentialing delays, with some hospitals reporting losses exceeding $1 million annually.

The survey, released by Medallion, polled over 580 healthcare leaders from provider groups, health systems and payers. More than half of respondents reported revenue losses or delays due to bottlenecks in the credentialing process. Among hospital leaders who could quantify the impact, about 1 in 5 reported losses exceeding $1 million.

Provider groups also feel the pressure from credentialing bottlenecks, with 12% reporting an impact of over $1 million. Meanwhile, most group leaders (40%) reported a financial impact of $25,000 to $100,000.

Overall, 69% of health systems, hospitals, and provider groups reported losses of $1,000 to $5,000 per provider per day due to payer enrollment delays. These delays cause months of uncompensated care, in addition to administrative backlogs, researchers explained.

Respondents directly linked workforce challenges to large-scale revenue losses and delays. About 38% reported high turnover or burnout, while 20% said their organizations have open credentialing and enrollment roles.

Meanwhile, 15% of respondents said their organizations struggle to hire experienced back-office administrators.

Most healthcare organizations manage medical credentialing in-house, the survey confirmed. Approximately 55% of respondents reported managing credentialing entirely in-house, while 7% used a hybrid model and 10% outsourced to a credentialing verification organization (CVO). The remaining respondents were unsure what model their organizations used.

Additionally, the percentage of respondents saying they use a CVO decreased from last year's survey, in which 14% outsourced credentialing.

With healthcare organizations relying on their own staff and workflows for credentialing, there is an opportunity for AI to mitigate the financial impact of provider enrollment delays, researchers stated.

However, just 12% of respondents said they have invested in AI for medical credentialing and provider enrollment workflows. Healthcare leaders are funneling more dollars into AI solutions for clinical documentation automation and workforce optimization, according to the survey. Another 16% also said their organizations aren't investing in AI at all in these areas, as well as patient access, revenue cycle management and supply chain management.

In short, most healthcare organizations are investing in AI for back-office functions, but those investments aren't focusing on the administrative workflows contributing to revenue and onboarding delays.

"While AI and automation offer benefits, such as reducing processing times, improving accuracy, and accelerating revenue capture, adoption remains slow by organizations, health plans and accreditors. We need to utilize AI and automation to reduce credentialing and provider enrollment timeframes," Ann Klinger, director of Oregon Health and Sciences University's Health Medical Affairs, said in the report.

However, most payers and providers are stuck in survival mode, according to Jennifer Mohler, chief revenue cycle officer at Southwest Medical Imaging and a survey respondent.

"Many providers are associated with multiple entities, and affiliations are fluid," she said in a press release. "Gone are the days of providers staying with an organization for a significant portion of their career. This makes having a strong enrollment process more critical than ever. The risk of lost or delayed revenue for provider groups has never been higher."

Jacqueline LaPointe is a graduate of Brandeis University and King's College London. She has been writing about healthcare finance and revenue cycle management since 2016.